Affected by the sharp drop in international oil prices in early September, PTA futures prices continued to fall. Later, as international oil prices stabilized and rebounded, PTA futures prices rose slightly, but the extent was relatively limited. In the short term, PTA prices mainly oscillate; in the medium and long term, due to the intensifying contradiction between supply and demand and the expectation of weakening cost-side support, the overall trend of PTA prices is expected to be weak.
Short-term international oil prices fluctuate widely
At present, although global crude oil demand has rebounded significantly from the second quarter, due to the impact of the new coronavirus pneumonia epidemic, market concerns about the recovery of crude oil demand have increased. The three major crude oil institutions also in the latest assessment They have lowered their crude oil demand expectations. In its September Short-Term Energy Outlook report, the U.S. Energy Information Administration (EIA) lowered its forecast for global crude oil demand growth in 2020 by 210,000 barrels/day to -8.32 million barrels/day, and lowered its forecast for global crude oil demand growth in 2021 by 49%. million barrels/day to 6.53 million barrels/day. In its latest monthly report, OEPC lowered its global economic growth forecast for 2020 from -4% to -4.1%, predicting that global crude oil demand will decrease by 9.46 million barrels per day in 2020 (previously predicted to decrease by 9.06 million barrels per day). In its latest monthly report, the International Energy Agency (IEA) lowered crude oil demand in 2020 by 200,000 barrels per day to 91.7 million barrels per day, the second downward revision in the past two months. This casts a “shadow” on future oil price trends.
Normally speaking, June to November every year is the hurricane season in North America. After Hurricane Laura affected drilling platforms and oil refining facilities in the Gulf of Mexico, there have been more recent hurricanes. There are multiple hurricanes on the way. Tropical Storm Sally is moving northwest toward the northern Gulf Coast and could cause historic flooding along parts of the northern Gulf of Mexico, the National Hurricane Center said. Affected by the hurricane, 21% of offshore crude oil production and 25% of natural gas production in the U.S. Gulf of Mexico have been shut down, and some refineries on the Gulf Coast have also been affected. Before the impact of “Sally” is over, a new hurricane is coming. The U.S. National Hurricane Center stated on the evening of September 15 that Tropical Storm Teddy may become a hurricane late Tuesday or early Wednesday. The recent continuous hurricanes in the U.S. Gulf of Mexico have hindered crude oil production activities in the region. The possible interruption of U.S. crude oil supply has formed a relatively obvious support for international oil prices. Under this influence, international oil prices may fluctuate widely in the short term.
The picture shows the trend of the main contract of WTI crude oil (unit: US dollars/barrel)
PTA device maintenance has become key
The picture shows the annual domestic PTA production capacity (unit: 10,000 tons)
2020 is a big year for PTA production. In the first half of the year alone, Zhongtai Chemical and Hengli Petrochemical Phase 4 were put into production. After Hengli Petrochemical Phase 5 was fully put into production in July, the domestic annual PTA production capacity increased. to 54.755 million tons, an increase of 6.2 million tons from the end of 2019, an increase of 12.77%. In the fourth quarter of 2020, several new PTA devices are planned to be put into operation in China. Among them, the Xinfengming Phase 2 2.2 million tons/year device is basically confirmed to be put into operation at the end of September or early October. The two sets of Zhongjin Petrochemical and Fujian Baihong total 5.8 million. There are also plans to put the ton/year device into operation at the end of the year; if all the aforementioned plans are completed as scheduled, the domestic annual PTA production capacity will reach 62.755 million tons by the end of 2020, an increase of 14.61% from the beginning of September and a significant increase of 29.25% from the end of 2019. The substantial increase in production capacity will further increase the pressure on domestic PTA supply in the later period. Based on the average daily operating load of PTA equipment this year, it is estimated that the new equipment put into operation in the later period will bring an average monthly supply increase of 583,700 tons, which is higher than the domestic PTA monthly average during the year. Output increased by 14.55%.
When the pressure for capacity expansion in the later period is relatively certain, the maintenance status of existing domestic PTA devices will become the key to the actual increase in PTA supply. In 2020, domestic PTA processing profits did not narrow as expected. Instead, they remained at a high level for a long time due to the sharp drop in international oil prices. This led to a decrease in the willingness of domestic PTA production companies to proactively shut down for maintenance, and many large-scale installations have not yet been carried out. Annual maintenance. According to public statistics, as of mid-September, there were 27.425 million tons/year PTA devices in China that had not yet undergone annual inspection, accounting for 50.09% of the total domestic PTA production capacity. Among them, the 10 million tons/year capacity device has a clear maintenance plan, but if the devices that have started short-term maintenance are excluded, the remaining production capacity of the devices that have maintenance plans but have not yet been overhauled is only 2.55 million tons/year. If PTA processing fees continue to be at a high level in the later period, PTA equipment maintenance efforts may be limited, and PTA supply will increase significantly after the new production capacity is put into operation; if PTA processing fees are significantly reduced, PTA companies will be less willing to stop for maintenance. Enhanced, the shutdown of multiple large-scale equipment will offset the increase in supply brought about by the commissioning of new equipment for a period of time, thus easing the pressure to increase PTA supply.
The table is a summary of PTA devices that have not yet been overhauled but have clear maintenance plans
The increase in polyester production is limited
September is the traditional peak season for the polyester and terminal weaving industries. With the nationalWith the increase in orders, terminal looms have also got rid of their long-term low-level operation, and gray fabric inventories have declined to a certain extent. As of September 17, the daily operating load of looms in Jiangsu and Zhejiang was 74.3%, an increase of 18.8 percentage points from the previous low, and a decrease of 4.7 percentage points from the same period in 2019. The inventory days of gray fabrics in sample weaving enterprises in Shengze area were 44 days, which was 18.8 percentage points higher than the previous low. The peak fell by 1.5 days and increased by 5 days compared with the same period in 2019.
In addition to the increase in domestic market orders, textile and apparel foreign trade has also shown a rebound trend. As overseas epidemics have eased, many countries have resumed work and production while normalizing epidemic prevention and control. my country’s textile and clothing exports have achieved positive growth for five consecutive months since the second quarter. From a structural point of view, with the decline in demand for epidemic prevention materials, the growth rate of textile exports has declined, while the trend of clothing exports has improved. In August 2020, my country’s textile and clothing exports were US$30.925 billion, a year-on-year increase of 16.85%. Among them, textile exports were US$14.718 billion, a year-on-year increase of 31.95%; clothing exports were US$16.207 billion, a year-on-year increase of 3.13%, achieving positive growth for the first time in the past six months. From January to August 2020, my country’s cumulative export volume of textile and clothing reached US$187.407 billion, a year-on-year increase of 8.11%. Among them, textile exports reached US$104.798 billion, a year-on-year increase of 33.43%, setting a record for the same period in history; clothing exports reached US$82.609 billion, a year-on-year decrease of 12.86%, setting a record for the same period in the past 10 years.
The recovery of the terminal weaving market has boosted the polyester industry. However, due to the still high inventory of various polyester varieties and low profits, the start-up rate of polyester equipment has increased. Restricted. As of September 17, the operating rate of polyester plants was 87.79%, a decrease of 2.3 percentage points from the same period in 2019. As of September 17, the inventory days of polyester chips were 14 days, an increase of 11 days compared with the same period in 2019; the inventory days of polyester staple fiber were 4.6 days, an increase of 4.6 days compared with the same period in 2019; the inventory days of polyester filament POY, FDY, and DTY They were 18.8 days, 18.1 days, and 35.1 days respectively, which were 13.3 days, 9.1 days, and 17.1 days more than the same period in 2019. As of September 18, the profit from polyester chip processing was 453.18 yuan/ton, the profit from polyester staple fiber processing was 198.18 yuan/ton, and the profit from polyester filament POY, FDY, and DTY processing was -371.83 yuan/ton and -421.83 yuan/ton respectively. tons, -271.83 yuan/ton.
PTA inventory pressure is difficult to alleviate
Affected by the epidemic, the first half of the year The demand for PTA is poor, while the overall supply remains high, which led to the rapid accumulation of PTA social inventory in the first half of the year and continuously refreshed historical peaks. On August 7, the domestic PTA social inventory rose to 3.985 million tons, setting a record high and only one step away from the 4 million tons mark. With the increase in maintenance of domestic PTA equipment in mid-August, PTA social inventory has entered a state of continuous destocking for the first time in a long time. However, the destocking speed is relatively slow, and the pressure of PTA inventory that continues to be “sky-high” is difficult to effectively alleviate. In addition, the centralized cancellation of PTA futures warehouse receipts in September caused a large amount of PTA futures inventory to be converted into spot goods and flowed into the market, further slowing down the destocking of PTA. After more new devices are put into production, PTA supply will further increase, but demand is expected to be difficult to keep up with the “pace” of supply increase, and PTA inventory pressure will further increase. As of September 18, PTA social inventory was 3.923 million tons, a decrease of 62,000 tons from the previous high, and a significant increase of 2.397 million tons from the same period in 2019.
At the same time, during the stage of large-scale expansion of production capacity, there is still room for compression of PTA processing profits. This year is a big year for the commissioning of PTA equipment. Against the background of limited demand growth, the commissioning of a large number of new equipment also means that market competition has intensified. It is difficult to repeat the “glory” of high PTA processing profits in previous years. Due to the sharp fall in international oil prices in the early stage, while the price of PTA fell sharply, the price of its raw material PX also fell sharply and even more. Therefore, PTA processing profits remained at a relatively high level for most of 2020. In early June At one time it was close to 1,000 yuan/ton. As international oil prices rebound to around US$40/barrel, PTA processing profits have also been compressed due to the rebound in raw material prices, but the overall level is still around 600 yuan/ton. As of September 18, domestic PTA processing profits were approximately 577.22 yuan/ton.
The cost of PTA processing is closely related to the process technology and device technology used by the company. Generally speaking, the older the production device, due to its backward process technology and The aging of the device leads to higher processing costs. At present, domestic PTA devices can be roughly divided into three categories: The first category is some devices that were put into operation earlier and have smaller single production capacity, such as old devices in the Sinopec system and small 600,000-ton devices such as Hanbang/Jialong. and Honggang Petrochemical/Zhuhai BP and other devices with a capacity of less than 1.5 million tons; Category 2 is large devices with a production capacity of more than 2 million tons, and devices such as Yisheng, Hanbang Line, Hengli Petrochemical and Fuhaichuang all fall into this category ; Category 3 includes some of the latest installations put into production, such as the 2.2 million-ton new device in Tongkun Jiaxing and the latest Xinfengming and Hengli Petrochemical Line 4. From the perspective of fixed costs of various types of equipment, old equipment with a small single set of production capacity is undoubtedly the highest. The fixed processing cost of some equipment may be more than 1,000 yuan/ton; the latest equipment put into production has a large single set of production capacity base and new technologies. The application has the lowest fixed processing cost. As more devices using new processes and lower fixed costs are put into production, we believe that there is still room for further compression of current PTA processing profits.
In short, although the terminal weaving market is in the traditional peak season, polyester inventory pressure is high, and its operating rate is difficult to further improve, thus limiting PTA Increase in demand. At the same time, the lack of PTA installation and maintenance arrangements has also kept the supply of PTA basically stable. In the short term, changes in the supply and demand side of PTA are limited, and changes in the cost side caused by fluctuations in international oil prices will become an important factor affecting the trend of PTA futures prices. In the context of the interweaving of long and short factors in the international crude oil market, it is expected that PTA futures prices will mainly oscillate in the short term. In the medium to long term, as more new devices are put into production, the supply of PTA will further increase. On the demand side, due to doubts about the continuity of terminal orders, demand will be difficult to keep up with the increase in supply, and the contradiction between PTA supply and demand will intensify. As inventory pressure continues to increase and there is room for further compression of PTA processing profits, the overall trend of PTA futures prices is expected to be weak.
�Limits the increase in PTA demand. At the same time, the lack of PTA installation and maintenance arrangements has also kept the supply of PTA basically stable. In the short term, changes in the supply and demand side of PTA are limited, and changes in the cost side caused by fluctuations in international oil prices will become an important factor affecting the trend of PTA futures prices. In the context of the interweaving of long and short factors in the international crude oil market, it is expected that PTA futures prices will mainly oscillate in the short term. In the medium to long term, as more new devices are put into production, the supply of PTA will further increase. On the demand side, due to doubts about the continuity of terminal orders, demand will be difficult to keep up with the increase in supply, and the contradiction between PTA supply and demand will intensify. As inventory pressure continues to increase and there is room for further compression of PTA processing profits, the overall trend of PTA futures prices is expected to be weak. </p
